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Biotech industry to touch $7 bn mark by FY15-end: study

The findings were part of the study "Access to Healthcare: Indian Perspective", conducted by Assocham

BS Reporter  |  Bangalore 

Growing at an average rate of about 20%, India's comprising of bio-pharmaceuticals, bio-services, bio-agriculture, bio-and bioinformatics may reach the $7 billion mark by the end of FY15, an body said in a study.

"The biotechnology industry in India, comprising of about 400 has grown three-fold in the last five years to reach $4 billion in FY13," according to a study -- 'Access to Healthcare: Indian Perspective', conducted by The Associated Chambers of Commerce and Industry of India (Assocham).

India's biotechnology sector is divided into five segments based on products and services offered - biopharmaceuticals, bioservices, bioagriculture, bioindustry and bioinformatics. "Biopharma is the largest sector contributing about 62% of the total revenue followed by bioservices (18%), bioagri (15%), bio-industry (4%), while bioinformatics is still at a nascent stage contributing just about 1% of the total revenue."

With revenue generation to the tune of over Rs 12,600 crore, the bio-pharma sector comprises of vaccines, therapeutics and diagnostics. While, India has emerged as a leading destination for clinical trials, contract research and manufacturing activities owing to the growth in the bio services sector, which accounts for revenue generation worth about Rs 3,800 crore.

"India's biotechnology sector is benefitting from several advantages like its cost effectiveness, research and development (R&D) expertise and personal skills as India is now globally recognised as an ideal location for manufacturing biotech products and for conducting high-level research programmes in the field," said D S Rawat, secretary general of Assocham while releasing the chamber's study.

Increasing investments, outsourcing activities and exports are the key drivers for growth in India's biotech sector, he said.

"Biotechnology is a capital-intensive sector with long gestation periods for returns.

Hence, it is important to provide an enabling environment such as incentives, infrastructure and funding models to make the industry sustainable. One such model is through life sciences park/biotech clusters," he said.

The global biotechnology industry is undergoing transaction, creating enabling factors that can lead to the growth of Indian biotech industry, noted the Assocham study. "India can play a key role in reducing the cost and time to market for new drug development through outsourcing of various component of the drug development process."

Since top pharma spend a large part of their research on licensing new modules, there is an opportunity for R&D-focused Indian biotech to enter into such alliances through collaborative development projects, the study added.

Besides, Indian companies with limited financial resources can optimize business models by partnering with larger companies for product development and licensing at an early stage as such deals are more common compared to the middle and late stage deals.

However, dearth of trained manpower is a key challenge particularly in the area critical for success of discovery programmes, noted the Assocham study. "India is strong in informatics and chemistry but still needs personnel in medicinal chemistry, invitro biology and efficacy-related animal models," the study said.

"Traditional education system produces several chemists and biologists. But, they are not employable for industrial research and there is limited leadership available in these disciplines within industries," the study said, adding "both industry and the government together need to take concrete steps to bolster the R&D capabilities by providing more on-the-job training and aggressively recruit personnel to fill in the gaps."

There is also a grave need to build a strong proactive law-enforcing system so that the confidence building and global perception on (IP) protection are changed favourably to create a positive environment for discovery based collaboration, highlighted the study.

There is also a need to strengthen and streamline the regulatory framework to meet the global standards, the study added.

First Published: Tue, May 06 2014. 17:44 IST